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India Equity Research Reports, IPO and Stock News
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http://www.kotaksecurities.com/pdf/dmb/MorningInsight16042012.pdf
INFOSYS TECHNOLOGIES LTD
PRICE: RS.2400 RECOMMENDATION: ACCUMULATE
TARGET PRICE: RS.2599 FY13E P/E: 14.8X
4Q results were disappointing with volumes down by 1.5% QoQ. The
revenue guidance for FY13 suggests a volume growth of about 8% -
10%, which is also below expectations.
These numbers reflect the impact of the continuing sluggishness in the
sector, unexpected scale-downs at the quarter end and also the
company's strategy of focusing on high quality growth. The muted comments of the management on the macro scene are of concern and will
likely weigh on sentiments in near term.
The quarter end issues are transient, in our view. The management
changes at the client end have impacted scale ups, which will likely restart in due course. Also, the scale-downs due to reduced urgency on
compliance / regulatory issues may be substituted by spend in other areas like mobility, productivity, etc. We note that, the guidance suggests
pick-up in growth in the quarters following 1Q.
The management's focus on high quality revenues has likely had some
impact on the revenue growth. However, we believe this will hold the
company in good stead over the longer term. Infosys has a TCV (total
Contract Value) outstanding of about $350mn already in its Products,
Platforms & Solutions business, which is encouraging. It continues to
win large deals (5 in 4Q) and has also added a record 52 clients in 4Q.
We make changes to our FY13 estimates. We have assumed the rupee at
50/USD in FY13. We expect the EPS to be Rs.162 (Rs.169 earlier) in FY13.
We accord valuations similar to the average valuations of previous lowgrowth phase (FY10).
We remain structurally positive on the long term prospects of Infosys.
The stock is expected to remain range-bound in the short term in the
absence of any triggers and any further fall in price can be utilized to
buy the stock with a medium - to - long term perspective. ACCUMULATE
(BUY) with a PT of Rs.2599 (Rs.3034 earlier).
Recessionary conditions in the developed economies and a sharp appreciation in the rupee beyond our estimates are the key risks to our revised
earnings estimates and recommendation.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://www.kotaksecurities.com/pdf/dmb/MorningInsight16042012.pdf
INFOSYS TECHNOLOGIES LTD
PRICE: RS.2400 RECOMMENDATION: ACCUMULATE
TARGET PRICE: RS.2599 FY13E P/E: 14.8X
4Q results were disappointing with volumes down by 1.5% QoQ. The
revenue guidance for FY13 suggests a volume growth of about 8% -
10%, which is also below expectations.
These numbers reflect the impact of the continuing sluggishness in the
sector, unexpected scale-downs at the quarter end and also the
company's strategy of focusing on high quality growth. The muted comments of the management on the macro scene are of concern and will
likely weigh on sentiments in near term.
The quarter end issues are transient, in our view. The management
changes at the client end have impacted scale ups, which will likely restart in due course. Also, the scale-downs due to reduced urgency on
compliance / regulatory issues may be substituted by spend in other areas like mobility, productivity, etc. We note that, the guidance suggests
pick-up in growth in the quarters following 1Q.
The management's focus on high quality revenues has likely had some
impact on the revenue growth. However, we believe this will hold the
company in good stead over the longer term. Infosys has a TCV (total
Contract Value) outstanding of about $350mn already in its Products,
Platforms & Solutions business, which is encouraging. It continues to
win large deals (5 in 4Q) and has also added a record 52 clients in 4Q.
We make changes to our FY13 estimates. We have assumed the rupee at
50/USD in FY13. We expect the EPS to be Rs.162 (Rs.169 earlier) in FY13.
We accord valuations similar to the average valuations of previous lowgrowth phase (FY10).
We remain structurally positive on the long term prospects of Infosys.
The stock is expected to remain range-bound in the short term in the
absence of any triggers and any further fall in price can be utilized to
buy the stock with a medium - to - long term perspective. ACCUMULATE
(BUY) with a PT of Rs.2599 (Rs.3034 earlier).
Recessionary conditions in the developed economies and a sharp appreciation in the rupee beyond our estimates are the key risks to our revised
earnings estimates and recommendation.
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